Issues in the Design of Monetary Policy Rules

Bennett McCallum

No 6016, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Topics covered in this survey paper include the following: distinguishing rules from discretion in practice; the feasibility of rule-like behavior by an independent central bank; optimal control vs. robustness as research strategies; choice among target variables; growth-rate vs. growing-level target paths; feasibility of interest rate and monetary base instruments; nominal indeterminacy as distinct from solution multiplicity; root-mean-square performance measures with interest rate and monetary base instruments; operationality of rule specifications; stochastic vs. counterfactual historical simulation procedures; interactions between monetary and fiscal policies; and the fiscal theory of the price level.

JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 1997-04
Note: EFG ME
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Citations: View citations in EconPapers (97)

Published as McCallum, Bennett T., 1999. "Issues in the design of monetary policy rules," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 23, pages 1483-1530 Elsevier.
Published as McCallum, Bennett T. "Recent Developments In The Analysis Of Monetary Policy Rules," FRB Saint Louis - Review, 1999, v81(6,Nov/Dec), 3-11.

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